Gold News

Gold rises in Europe but slips versus the Yen

Gold rose in Monday's European session, closing higher against all major currencies except the Japanese Yen.

The Yen – now suffering a huge "short" position taken out by the world's hedge fund and investment bank speculators – somehow pushed gold 0.14% lower. It also recovered to ¥120 per Dollar, up from ¥122 this time last week.

That move might start to worry the currency traders sitting on a record 173,005 contracts to sell the Yen today. Is there anyone left to sell Japan's currency? (Read more about the Yen's role in today's global finance markets here...)

Large gold traders meanwhile raised their net "long" position by 19% last week, when it broke $661 per ounce for the first time in 7 months.

"Gold has some spillover strength from crude oil," reckons Tom Hartmann, a commodity broker at Altavest Worldwide Trading Inc. in California. Crude oil rose back above $60 per barrel earlier today. Gold added more than $3.50 from its low point just before the New York opening. As London closed, it was trading above $650 per ounce.

Today's rise in gold prices was more pronounced for Sterling and Euro investors, both up 0.6% for the day after the latest economic data from the US helped support the Dollar on the international currency markets.

Gold reached £333 per ounce at one point, trading above €504 for German, French, Italian and Spanish buyers.

In the stock market, Polyus Gold – Russia's largest gold miner – said it raised output by 17% in 2006. Randgold Resources said it plans to match 2006 output this year. A new exploration site in the Philippines was cancelled.

On the demand-side, meanwhile, the Nihon Keizai Shimbun in Tokyo reported today that Japan may soon get a gold ETF, similar to the StreetTracks GLD shares traded in New York.

India is also due to get its first exchange-traded gold fund this month. The world's largest private gold market swallowed up one ounce in every five sold worldwide last year.

What might the Benchmark ETF mean for India's gold demand in 2007? Click here for a full report...

Adrian Ash is director of research at BullionVault, the world-leading physical gold, silver and platinum market for private investors online. Formerly head of editorial at London's top publisher of private-investment advice, he was City correspondent for The Daily Reckoning from 2003 to 2008, and he has now been researching and writing daily analysis of precious metals and the wider financial markets for over 20 years. A frequent guest on BBC radio and television, Adrian is regularly quoted by the Financial Times, MarketWatch and many other respected news outlets, and his views from inside the bullion market have been sought by the Economist magazine, CNBC, Bloomberg, Germany's Handelsblatt and FAZ, plus Italy's Il Sole 24 Ore.

See the full archive of Adrian Ash articles on GoldNews.

Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News.

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